Which of the Following Statements Does Not Represent a Limitation

question 42

Multiple Choice

Which of the following statements does not represent a limitation of using return on investment (ROI) for measuring and evaluating performance?

• A) ROI uses accounting income which is based on historical costs.
• B) ROI cannot be used to compare divisions of different sizes.
• C) ROI has the potential to create goal congruence problems.
• D) ROI fails to align some costs incurred in one period with the benefits received in another perioD.
• ROI can be used to compare different sized divisions-this is an advantage of ROI.